With the advent of the Smart Grid that provides an infrastructure for energy supply (e.g., electricity) generation and transmission for delivery from suppliers to consumers under control of digital communications, the ability to access real-time information on supply availability and prices supported by demand offers unique opportunities to improve the overall efficiency of the energy grid in terms of both long-term supply-demand management and near-term dispatching of diverse generation facilities to meet current demand. The responsiveness and flexibility envisioned for the Smart Grid provide additional advantages in facing the significant new challenges of integrating distributed and intermittent generation capability, such as small-scale generators and renewable energy sources (wind, solar, etc.), at a scale that current grid technology simply cannot achieve. This is becoming more critical as renewable energy technologies are playing an increasingly important role in the portfolio mix of electricity generation.
Currently, only a few published methods exist that considers dispatching policy with distributed renewable generation (e.g., wind energy). However, the industry has yet to produce a system or method that performs integrating renewable generation and demand response together into power generation management and risk control.
That is, existing utility generation dispatching policies do not integrate demand response for risk management.
It would be highly desirable to provide a system and method that achieves improvements in both total financial measures and risk control over existing mechanisms that do not consider virtual generation (demand response) and distributed intermittent generation (renewable sources).